Tag: Crowdfunding

15 Jun

Crowdfunding Campaigns: Success or Surplus?

Arielle Di Iulio Charities, General Interest, In the News, Trustees Tags: , , , , , , , 0 Comments

George Floyd died tragically during an arrest by Minneapolis Police officers on May 25, 2020. Mr. Floyd’s highly publicized death ignited demonstrations and protests across the United States and Canada against police brutality and in support of anti-racism. Many individuals are also showing their support to this cause with donations to community groups, non-profit organizations, and other fundraising campaigns with a related mission or purpose.

One of the more successful fundraising campaigns has been the George Floyd Memorial Fund established by Mr. Floyd’s brother, Philonise Floyd, on GoFundMe, an online crowdfunding platform. This campaign has raised just over $14 million to date, far surpassing its original target of $1.5 million. The overwhelming success of this GoFundMe campaign invites the question – what happens if more funds are donated to a fundraising campaign than originally requested?

Crowdfunding campaigns are often created in order to raise money for a specific purpose or project. If more money is raised than is needed to fulfill the campaign’s intended purpose, then there will be surplus funds. A common example is a GoFundMe campaign created to defray funeral expenses and the campaign ends up raising funds over and above the actual costs incurred for the funeral. What is the campaign promoter entitled, or perhaps required, to do with the leftover funds?

In general, if money is donated for a specific purpose and not all of the funds raised can be applied to that specific purpose, the surplus funds may be returned to the donors via a resulting trust. Returning donated monies can be burdensome where there have been a significant number of donors and/or anonymous donors who cannot be easily identified. To help avoid this situation, a campaign promoter can include alternative purposes for which funds can be used. These additional purposes must be set out at the time the funds are solicited.

In the case of the George Floyd Memorial Fund, the GoFundMe page states:

“This fund is established to cover funeral and burial expenses, mental and grief counseling, lodging and travel for all court proceedings, and to assist our family in the days to come as we continue to seek justice for George.  A portion of these funds will also go to the Estate of George Floyd for the benefit and care of his children and their educational fund.”

The above description includes multiple purposes for the collected funds. Some of these purposes likely have been or will be fulfilled, such as the payment of funeral expenses. However, other purposes are seemingly unbounded, such as supporting the care and education of Mr. Floyd’s children. Thus, although the George Floyd Memorial Fund garnered millions of dollars in excess of its original goal, it is likely that all of these funds can properly be applied to the campaign’s defined purposes. If this is the case, then no portion of the collected funds will be considered to be surplus and all of the money should remain available for the benefit of the Floyd family.

Thanks for reading!

Arielle Di Iulio

02 Nov

Go Fund Me Funerals

Paul Emile Trudelle Estate & Trust, Estate Planning, General Interest Tags: , , 0 Comments

Funerals can be expensive. Coming up with the money required for a proper disposition of remains can be difficult for many.

One option that is available to assist in paying funeral expenses is crowdfunding.

A recent search of “funeral” on  gofundme.com revealed 1,759,748 results. According to the gofundme.com website, over 125,000 memorial campaigns were commenced per year, and over $400m was raised per year. Click here for a link to the gofundme.com funeral fundraising information page.

Graveyard

An article on funeraldirect.co on crowdfunding for funerals gives tips on how to mount a successful crowdfunding for funeral expenses campaign. Tips include:

  • Use bright images or videos;
  • Use descriptive and catchy titles;
  • Spread the word using other social media, such as Facebook and Twitter;
  • Share the link directly to friends and family;
  • Keep supporters updated on the progress of the campaign;
  • Make it clear how the donations are to be used; and
  • Thank contributors for their support.

With respect to how the funds can be used, see an excellent blog from Suzana Popovic-Montag, Does Crowdfunding Establish a Trust?

Have a great weekend.

Paul Trudelle

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